Apaq Technology Co., Ltd. (TWSE:6449) Is About To Go Ex-Dividend, And It Pays A 1.6% Yield

Apaq Technology Co., Ltd. (TWSE:6449) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Apaq Technology's shares before the 25th of June to receive the dividend, which will be paid on the 15th of July.

The company's next dividend payment will be NT$2.30 per share. Last year, in total, the company distributed NT$2.30 to shareholders. Looking at the last 12 months of distributions, Apaq Technology has a trailing yield of approximately 1.6% on its current stock price of NT$147.00. If you buy this business for its dividend, you should have an idea of whether Apaq Technology's dividend is reliable and sustainable. As a result, readers should always check whether Apaq Technology has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Apaq Technology

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Apaq Technology is paying out an acceptable 67% of its profit, a common payout level among most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (66%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see how much of its profit Apaq Technology paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Apaq Technology's earnings per share have risen 11% per annum over the last five years. Apaq Technology has an average payout ratio which suggests a balance between growing earnings and rewarding shareholders. This is a reasonable combination that could hint at some further dividend increases in the future.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Apaq Technology has lifted its dividend by approximately 11% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Apaq Technology? Higher earnings per share generally lead to higher dividends from dividend-paying stocks over the long run. However, we'd also note that Apaq Technology is paying out more than half of its earnings and cash flow as profits, which could limit the dividend growth if earnings growth slows. To summarise, Apaq Technology looks okay on this analysis, although it doesn't appear a stand-out opportunity.

So while Apaq Technology looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Case in point: We've spotted 1 warning sign for Apaq Technology you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com